Balance on student loans, Latoya's balance on student loans

Balance on student loans

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Reference no: EM13875103

Latoya's balance on student loans is $24,000 today (first day of month). The rate on the loan is 6% NAR with monthly compounding.

a. Latoya would like to pay off the loan in three years. The first payment would be at the end of the present month. What equal end-of-month payments would she have to make to do this?

b. Alternatively, Latoya could borrow $24,000 at 4.0% NAR but with weekly compounding and use this to pay off the student loan today. This loan requires an upfront application fee of $1,000 that will be added to the loan amount. The first monthly payment would be at the end of this month. What would the equal end-of-month payments be on this loan if it was paid off in three years?

Reference no: EM13875103

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